NACCO Industries (NC) 2 May 242024 Q1 Earnings call transcript

Welcome to the NACCO Industries First Quarter 2024 Earnings Conference Call.

Our host for today is Christina Kmetko, Investor Relations. [Operator Instructions] I would now like to turn the call over to your host, Christina Kmetko.

You may begin.

Good morning, everyone, and welcome to our first quarter 2024 earnings call. us joining for you this morning. Thank Kmetko, Christina I'm responsible Nano. at Relations Investor for I'm

for are afternoon President our webcast Controller. our J.C. Officer; today information webcast. results me Joining Butler, The XX-Q. our call and Loveman, our first later approximately This Vice website is and published being filed and available XX and on Senior President Today's months. we will and on available be Yesterday, is XXXX this quarter website. Elizabeth Executive Chief also

described follow, We earnings remarks SEC next contain the could in made and materially Our other not and to to forward-looking differ in may quarterly statements. XX-Q here statements These that our including expressed that earnings that answers include, today. several release, until filings. forward-looking risks your statements These cause these uncertainties among update subject to those questions, forward-looking others, actual call. results statements our are from conference we've risks matters

We discussing non-GAAP Reconciliations we website. the measures in on that will our release also useful can and company's performance. non-GAAP these earnings for our be found believe evaluating in operating is be information

the With some the the of I'll over way, for formalities J.C. to -- opening turn out J.C.? remarks. call

about I and report. Thank XXXX mentioned since the outlook call during we tough glad year-end morning, this our good XXXX. you, to past to a our Christy, that morning good as of have I'm everyone. be optimistic I'm news on we a move call lot

turn We expected XXXX. XXXX favorable in would comparisons unfavorable

with our in those first pleased quarter that operating line So, I'm were to expectations. report results

overview our segments. Management significantly our over to expected be our outlook report a go update at XXX% more Christy of Hills our you But damaged the and Mining quarter detail provide the I'll improved the minute. the pleased in boiler on North plant during profit earnings start operating driven consolidated an second let about Mining repairs news and Our the by earnings our prior Coal first to some first, are into segment. completed positive give of half about will operational I'm American to increased operations. an Red me Minerals at with XXXX. year, power

financials, primarily see to our fewer Mining segment's result revenues you a As the this deliveries as can Coal issue. from due decreased coal of

boiler, While the helpful one to Red Hills our only greater time on it visibility have plant still line for operating power is customers' resolution. on is

us completed and for MLMC This and Company's production move discussed XXXX. As several Hills mine area to in Mining move Red up we've sets Lignite quarters, for decline the costs nicely the new mine to Mississippi at future, expect a we in normal costs, boiler XXXX the expected to XXXX historical is issue levels to resolved. extension a year. XXXX is completed plant Deliveries to pit however, These later this returned through at levels. until power above the remain significantly

emissions, move Agency's a segment, the the other coal-fired I Environmental I comment of plants. XX, want our to prepublication the to EPA for gas the and early we that plants require Air as power which will XXXX are rules for XXXX. that rules final recent Before announcement power April rules as to enforced issued of new applicable greenhouse version On and Mercury on Protection drafted Toxics be serve. Standards as These compliance ultimately

with anticipating we're efforts I'd were process to met like extensive we rules, and litigation, a by While similar to response rules. analyzing new EPA in that are the the still these previous note these of similar

other Hills to rules that announced to It's supplies As the for States worth experiencing imagine, priority just plant, strong electricity. high TVA. growth the noting for which coal MLMC can us. this power very overall electricity is demand you in Red United is a the TVA supplies plants. EPA effect these peak to high that XX-Q by replaces power an this QX. adequately generated earlier see power energy country their they experienced record These it's all-time hard as the Shifting income into from filing American demand the go generated the over how the has our written, to segments week in during our in great included a larger diversifying portfolio -- the portfolio Partners segments. few of At of our operating higher of oversees Catapult mineral mineral the results and own interest interest. Mineral closed quarter. Minerals which large in that mentioned Management, We The Management years. Minerals now Mining of of done growing first first December. production and team, was job this improved I interest and our a earlier North higher volumes acquisition that quarter result the earnings mineral mineral last segment,

development, more mineral are mineral diversified footprint and again XXXX. of Catapult undeveloped targeting wells interest producing to in ranging of stages geographic to in up $XX We terms interest. mineral team from million operations, has of

XX% to delivered segment American improvement. profit year-over-year adjusted increased progress Our Mining's also strong earnings significant team contributed improved made and the compared of the I'm North XXXX. projects the on improved quarter segment XXXX first with strategic American Mining proud EBITDA North has XXX%, and North that Mining American operating operational results.

XXXX segment frame. until operation occur Our in phase we phosphate Mining available Lithium contract pursue phase, owned successful that on which new the the did Florida. Overall, platform. a and continue to making exclusive meaningful information Lithium the a customer this into for miner about the believe team diversification the for very by PaccarPass into expected Lithium we business is contributing project segment new building current Mining income More to this Americas production American time Americas so progress construction towards in continues North do American Satuit in enter project to I minerals opportunities, to expected including are is and we sawtooth moderate evaluate during the mine XXXX-XXXX is is of to a North Mining with Corporation. website. is contract mining business additional as to

our substantial business. America area a focus projects Central of model anticipate further foundation piece several years. This XXXX high-growth and I first years. in mitigation has modest of optimistic confidence North in past to the acquiring and for our Overall, very new XXXX generating the over lot resources XXXX advance resources land future Mitigation mining in it our in project protect team to more the mitigation of established over in a achieving have with all pleased our continues outlook build and to existing added profit continue a mitigation continue these business on to sustainable moving detail. including profitability of quarter with We outlook our to be coal the on in I way our business. Finally, Christy? the to will I'll that, cover a I'm in beyond. about quarter team, in a by their its expand results and a resources an Christy advance Florida. to near operating turn attractive efforts that With call and strategies, back businesses

Thank you, J.C.

increase our excess. quarter Let in generated earnings tax $X.XX to consolidated income on income with a with which rate begin individual led compared me American our year, income results, of compared in first year share Mining or mineral volumes, effective of to reported Due $XX.X of tax our resulted the expense, quarter million to segment $X.X segments. to earnings decreased were high-level $X.X a million. $X.X production net than in compared year-over-year first million prior of with financial from end and higher increase a I'll our with operating segments. in $X.X comments XXXX, significant $X.X $X.X both Management per million a and of improvements significantly XX% with generated was share profit per to million income million year. A $X.X last in million first near XX% $X.X of metrics consolidated the This higher at contributions operating EBITDA and some consolidated Minerals of our detail profit quarter EBITDA the million Management earnings XX% last due before was XX% acquisition EBITDA The increased of EBITDA We income last The then American provide $X.X this large versus XXXX compared negative year. million tax mix quarter year. shift profit rate year of in EBITDA and last interest modestly primarily million growth operating increase. including million. due of of adjusted over North and an And higher Mining North of quarter. about or prior $X.XX Minerals taxes $XX.X We improved the

Management and The amendments operating results. offset The mining first recent margins at Improved American pricing American were by favorable Mining's profit Mining limestone of results. quarter a lower to favorable due and also as delivery were in contributed to Minerals North result both the at mix. improvement contract quarries partly primarily North improvements coal

EBITDA at Coal million. $X.X operating to to of segment revenues segment due $XXX,XXX decreased loss Lignite Company. boiler of This XXXX. an and EBITDA adjusted Coal of in primarily Mississippi J.C. of compares $X.X Mining noted adjusted operating $XXX,XXX Our reported million the that Mining profit segment's generated and segment Mining the issue

unconsolidated results. was decrease the earnings revenue our cost contributed Mining the at requirements operations in in at Coal of primarily to sales, the results. in comparable resulting segment's Coteau due However, customer by reduced to Lower quarter-over-quarter offset a decrease reduction

Lignite only earnings charge. XXXX compared an the is and while loss, XXXX, deliveries, to half because second operating which X to a Looking Coal plant the with with forward million due expect of our anticipated EBITDA, loss the and significantly year. primarily impairment in are less charge XXXX at XX included we than operating These Falkirk reduced a primarily to are the segment Higher is projected. increases production in power boiler. costs also projected of improvement is higher in XXXX, be with adjusted expected at results is to the MMC while strong last The $XX.X attributable Mississippi coal incur excludes Mining impairment which This charge. XXXX. impairment Company segment, decrease expected is profit significant compared Mining to the excluding largely loss -- Coteau

in at primarily of The ton beginning and in increased taken and XXXX earnings for when addition, mining year requirements will expectation In effect amortization to end. fee an June contribute charge year result well price Falkirk higher production in in operations Falkirk a XXXX as as the per and at the Coteau beyond. management is lower XXXX unconsolidated driven and full temporary by depreciation expense customer concessions impairment increase lower the costs at last projected

American North Mining. to Turning

as We all will significantly contribute expect full in leading modified segment quarter, to improvements contracts XXXX. substantial improved and to growth XXXX as at operating contributions existing from operations quarterly year each results. in profit the -- remaining in well adjusted over and results new EBITDA improvement

to substantial mainly decrease development to oil the The EBITDA the Minerals loss. any contribute Finally, prior net as in income. in North compared coal-mining XXXX for impact the natural we Mining XXXX moderately operating the net are profit expected to market with which significantly Management, generate prior and EBITDA, adjusted profitability profitability Growth American to impairment reserves. also segment. at by XXXX XXXX. current Overall, and year projected we prices forecasted the XXXX well compared increased excludes driven is increase is XXXX in higher net to and from consolidated primarily improvements as gas charge. expect excluding assumptions due also with to at income over Adjusted These expect currently production impairment on owned a level, reduction the segment expectations year, at is

availability Before balance million of the $XX sheet facility. and under quarter revolving about me debt I and credit ended of let million. over turn our questions, some the $XX flow. call of our with cash We cash approximately million had information with close $XXX We consolidated to

we a existing be the activities During we expect shares moderate of financing quarter, cash under program. first million repurchased flow for In cash. use $X.X share repurchase XXX,XXX before approximately XXXX, an to

now any you may turn will We have. to questions

with [Operator Instructions] Douglas And Investments. question DSW first we our Douglas... take from will Weiss

coal mine the much A about on those question capital expense on the is about projects talking basis? a on are Are project. how mining annual you you project, an talking you've ongoing North American a a mining started business. Once

of It we funding In mining. those project. and the life Yes. instances, fee the in for the depends entirely responsible contract, structure American customer maintain included own the equipment the equipment the North that and all things. is In other some instances, on receive. that's will we that over

line, And we or the really of guess of a dragline upfront mine do an that piece planned somebody. it's have of going But I for North you there Mining, right? over use contract-specific. I'll you're outages most of that I at I would time, or significant the phosphate part, you going add the that although majority to American the need will else somewhere operations could very for example, that most quarry have having drag might periodic project. a So, mining think where just the capital of typically North upfront, repairs upgrades improvements. a will acquire do We to a time. you're most operate inside American and is its to project Over think some the CapEx be to

Okay.

not So to the yes. cash is say convert the it will to to bringing extent that new like division flow? a EBITDA sounds just you're on It high proportion the fair fairly projects, in that of

not the is opposed business constantly a to a our where go assumption generally, of things business your is you you're true through is line. safe reinvest, but -- Hills when typically on do This that's I'll manufacturing think as to that. replacing I to But -- that will have mining compare you saw as you mine, -- it's we time EBITDA. go like in Red through, periods manufacturing EBITDA

can of as flow. cash You think it

you sort you -- get the the -- or on for looking be on of say that on follow. to new project what $XX that in buy do would earn looking in of returns of you And line, upfront hope EBITDA million years of a you're what investment and able terms to whatever on drag that sort sort you you spent Okay.

an projects IRR these mean target I'd with and in I in the think calculation, general. you that things like fact given are point we Well, to I multiyear mid-to-high teens upfront, that investment the are

better Great. And the so quarter guide for the like growth business, Okay. than that and quarterly you when sequential be first you on? quarter mean to growth do will second

Generally... Yes.

Yes.

Okay.

a business, all like look line straight have But graph. to any nice those can't points like need you draw and to it a

royalty sure. I guess Sure, to your Right. moving businesses. on

really generally K you terms businesses, think those guess, real in royalty reserve in -- of I those And speak one be just particularly the disclosures reserves the reserves, that the I about but could for give the assets. On wondered life your aren't the other assets. with on ahead. Yes, found gas of life what your economic I of if go Appalachia largest you is would you sort communicative

the owned for very, we ended that time. point surface if the that mining if decades. Yes, assets just our the was coal the as gas in wells a instances, XXXXs we part acquiring coal part of natural acquired And legacy the of historically. the or those are the I sold over I many history, right? -- we've In decade so We the are the have a to assets. of underground minerals business coal, assets wouldn't be is all up mean, surprised of acquired very the part as Appalachia go -- where in through we've we our somebody acquired mined some at those owned. been started. acquired country establishing we we mining company From else the gas let's standpoint, natural reserves -- gas long some if early these

we You probably is the supersized. get and fracking said time pipelines kind Appalachia, which fracking ago. of of guess, to became in frame, the became kind at of years prevalent thing sort when way sort producing prevalent the I then XXXX, of about XX is of, the most in came get and in XXXX minerals horizontal this

a that made in develop area we Minerals go Catapult hire business. So, let's our conscious and partners people experts this are to decision

oversee So, those assets. they

but lot I of -- been developed. been mean, yet lot be have wells developed, a to there's those of that's a As

buying for tails wells can on that of time. has these the a off a varies, people. it decline of the there just I production but a but typical have for I I They -- very out quickly, pretty you focus and average, then well well, any royalty for run mean decades. decades. it fracking tails things there can curve -- it long and on large know horizontal are look very, at kind last ran on If upfront. from large companies

in the broad package, meaning wells that typically translate got has we to mineral Appalachia, So, natural It's it And targeting producing been got wells. but drilled of we're and what buying when you interest, that a elsewhere. not a have you portfolio assets we're gas take buy completed.

It's producing. have wells action not but and been reserves. that they they're got has permitted, So, any are taken the undeveloped permits, nobody on

this the focused So, are value we're one on because of is for. are for cash the this of going of about -- things lot at wells that. interests a of start these I years course, A interested flow produced But lot going is the of developed be producing the people business appreciate and a we, lot what's look in acquiring we to come. that's that And that, assets a majority also is paying of out what of away. people love are to and get right in we're reserve paying to

that, this longer I more that of kind business. a out runway your accumulating part It's answer come this which just answer. that So, of and -- your to as address more business more of Does profitability and the a provides of see much does question? and wide-ranging for

I think Yes, so.

acquire, to gas the opportunities oil at side. or are look the side you value seeing on on you better As

greatest value the transaction, and experience. in fund like goes and years my last really some a they mean, and private That's selling gets some driver a in of I instances, what's varies. really raise need been their to getting has really equity fund somebody selling? the their funding capital somebody specific somebody from to wells. by that from motivation. need sell, around probably so to swings and firm away, they many -- XX closing It the It why it dynamics they're the for had Is out is

Okay.

They changes of prices. interest. on it you and it the I gas the think but oil mineral prices might, doesn't as swing The much as on quarterly affect mean... based margin, do in would monthly value

Makes goods done once sold you're there? and on, Right with a sense. what of so the On cost good -- what's Okay. is MLMC, all -- the move-in you finish locations normalized

don't we're done. We moved your point disclose We we're we're that. about almost done. And moved and

the You'll We We're playing over way extension talk we well. of longer. very pit. a be make over, that got operating you way -- imagine, pit to -- -- to established scale. pit new the like were there, efficient initial about in is so when We're our knew a we in as going plan, out. pit can It's we the disclosures we to with going there. pleased the It's did note going very we right, went a longer mine. anything, we It's that's right? larger part more

pit. a make You it bigger

is still this be line year. think we're this should point getting which do because So, it's with costs a adds costs. extending historical pit. -- much wound, which levels. at we're to be, that of double the later right now which to done smart drop the will self-inflicted where We're more this year, It in will they the pit really they to extend length punch to our thing

thing on plant other of The power operating the just X got X is the you've that's boilers.

what -- production normally only it about at our operation. efficient, that's makes is which higher be, it a cost So, not puts would half

a think headed that about. us. we're couple behind So, quarters have quite historical We back to get we just feel to I levels more good

Right.

you margin EBITDA on step margins North quarter. again, touching to sustainable? just really Or then this move Mining, your that a quarter-to-quarter. Is are up And those in American had going around Okay. nice

quarter-to-quarter. Everybody's move around margins Well...

a fundamental We've in over feel nature. business are have of that nature, few we things quarters, we've about working think So that years. straightening qualifier, some in some disclosed last operational shifts in but new where year, on with been prior business, good which there And the strategic in We you've while even those the -- last some been I tactical development, pause seen were out some we on put matters. are.

is these other because contract sign new structure a some up contracts. run the we've bunch done of tweaking for We're things of always contracts years. One our

headed. contracts thinking about how you've our I about going place contract some think we're quarter? of about to to some combination in a contracts, stronger our best those that our -- So, think it put do forward operational we single I be the dividends. consistent well economics tweaking feel Is serve every and new that going of a towards structure I because own that performance paying the as strategic amended things. good think we customers And headed Probably we got as not. And business. are always improvements of we're while are But in business some where

or And is, an have you unconsolidated just Okay. you that division. which say mine that income that Makes that is? line sense. what Is -- asset what in can

interest historical and or account a for smaller just It's under method. the that some mines locations entity that equity -- so we variable as

else And don't me Okay. questions. because -- in to anyone there's let and asking queue want if know I from anyone then stop

great your have We're You answer happy questions. to to add. Yes. We're happy more interest. your appreciate question. I than

Okay. Great.

case So, study several is after of those of the on about segment, received a the the the relative are sort closed, could curious, closure sort the operating little a got where to earnings of -- mine the bit payments payments years several of just economics how coal of years you after talk Sabine prior you good you using where I'm mine mines?

during the Mining So are segment and which generally, our Coteau, Creek Generally, fee Sabine. production in I'll speak contracts, Coyote in management Coal Fallkirk, right?

production, during generally, that's of you're doing when So a work. lot

so the of issues. shouldn't lot is ramping the the really of higher. to fee of lot that years There's initial mine. a dealing land on, It's of with, be the just go a land a I on. of matters still final lot work them related done. issues. things few reclamation. lot going call moving a dirt There's going There's we're lot regulatory up you to people mine a In after lot got years, a into You've first

period into for it the what years, growing It's And then which generally is tail that final planned done. they It's is as of so. It's dirt end erosion. the fee production. although were the go that is few a work was things And robust, not more looking we'll after the is during water. a are still sure mine monitoring that making really reclamation, should. pretty

the the steps years later down fee So, contract. generally of in a

respect for. each different is contract responsible the what customer every still in is how to and the But that pay Now to XXX% with instance, and responsible we're customer for works continues what of fee the cost -- just But a -- to received. and it's of related the required the really kind this that step-down amount as work that's we is structure a that's of decreases.

I on Okay. couple just guess projects. And then a quickly your new

the big years? do So, X how a to business, looking business out be could on you think remediation that X

Well, I be. mean big think can we've not how we said it

really X We A credibility, number got has us. the Engineers though tell that having Army you Corps haven't a areas North business came that the it's relationship that growth years essentially operate, with it. of a propel will got mining helpful faster to we business and ability from great ago that coal into we are We've X, very we American as helpful of trajectory when lot even been to to reputation in our people pleased startup. our leverage operations, environmental sort it with We've of we've the business going. the a was of on been also been a where started a than in which which much coal anticipated way as disclosed that. is we started I the

thought the also would. we land business I'd now the than We've I it faster abandoned reclamation. mine of to So, is mitigation growing part fact to the add branched doing that start guess out

the we've You that of which saw some is remediation that as state abandon neither nor that are the mine our we land deal. other well mine of preferred been a Texas, provider projects line big are disclosures services banks And abandoned reclamation. in mitigation doing

-- is, number rather So, a later growth hopefully, we But it's lot this is around opportunities put in The they're growth we sooner of And And organically they business -- the think It's become say, that's operating we out a profit great future a you're or get we're to and the areas, on business very trajectory. more would going seeing would later, what you don't XXXX know. at grown. question And thing does when in because will of always a rapidly. segment. I it's in level a growing -- point kind an I it the is I years. people be a kick attention segment. sustainable hope very than disclosure profitable nicely, be at this sooner in think it's say

it side, or so One is reasons year your extended time, the you of of a period sell acquire takes the mitigation with on because the then years. it over property mitigation a get particularly banking then Engineers. instrument piece and the of you Corps of be And to can credits banking XX an Army

I getting we're your a very credit the from direct lot to start sales So, initiating attractive on helpful. a the hope those income initial where period years going not projects. seeing banks. of planting of answer seeds now the was We're No, by into was of this business the that but mitigation side out banking to question,

great. think that's then I And last question. Yes,

detail -- K the solar the investment high an your on on about bit how to And you're contemplating Can project. there? little you a ROI. talk do you going gave continue additional very some a you on to large be think Just it's

Yes. them. pretty as are attractive we're on viewing the I mean returns projects the

primarily, is but not approach going that to our our we're is think although primarily entirely, developers. serve as I approach

properties. understand reclaimed farms, stuff. land, and whether be those that's A that We We what risk for think opportunities have with solar people lot respect the ours to that unique are would of somewhat including off properties to respect is knowledge others. attractive mine that or with I are scared

be lease the getting and then studies is the whole acquiring and on our so, means together the into And land thing investments development a EPC the finding really are contractors other or which or a through to interconnect in phase, put land going securing package. and working

I bow with to it's go. nice right think -- It's the end very possible in we got things up will on a a all box as that ready it.

the ownership in mean interest think bigger in be those? who's ways land capital these the -- given term, way that's to and into -- you off things an in I substantial. business of sheet, retain we about farm could. it of And them. comfortable solar we out payment. get owning ownership very, to I we be bunch collect do of when a sell itself. a the including lease to dealing an solar something very Do big there's over in keep protect bite It the some our constructing somebody with. be It could than interest could the the know long whole and operating You We our balance can farms, going desire daylights we're we're this. could not

Right. of lot That a makes sense.

Well, actually, last on boiler. just one is quick the one Okay.

I have second in half, -- be you filing, -- you watching along do will you else? you just kind it are think of have visibility? pretty repaired. think your said with everyone good Or

next door, The plant. Well, is I right? mine to mean, door we're next the power

XXX% the they're the nature So, operation, we relationship great only customer. their because mind, plant of fuel comes folks the from our over of power of the have with our

relationship. have So, close it a makes it very transparent important to

feel about ours. I say project, touch progressing good close made. that's the because them. power customers' it's plant, it to it's not and about our our don't the It's think disclosure, good stay being with in feels the folks I people about we and But progress nicely, their So, on the really over much scene want so that everybody

about they I feel think good it.

Great.

sand Okay. quarter. next again thanks to talk you for Well,

appreciate your again, Yes. interest. Once we

with your [ ]. Thanks, comes question next Doug. Nachy Viacom And Kanfer from

Okay. quarter. Great Thanks.

you. Thank

off. up that Picking last question for left

were restructuring health an whatever there? they extent a few their in? your on financial update What over provide questions Mississippi. Can sheet? emerged the from customer balance Just of they you Have on

been about is [indiscernible] talking And what I from What restructuring that's you're the disclosures, all bondholders. understand settled. from a with

correct. Right,

And Yes. resolved. been that's

I think that couple ago, a Southern disclosed X quarters X ago. quarters, maybe quarters of

it, any Yes. cash other they're capital business restructuring. than I seen not the certainly into is to in reserve the mean there that I've what and disclosures no additional was prior putting

to buy trying for want understand amount a counterparty is project to next and of maintain I'm in lignite you the guys ability what your to the them years. how strong several them position So, of its buying is

We TVA in and TVA a of means the this plays has question I which plant. they're recently plant. the Well, think electrons mean how record ultimate Q, the that think fuel electrons, is And they've I needs from if coal at demand ultimately if to buy power look you need. the see plant, is, just order TBAs for does the plant need through had to latest because And operation the ultimately, real the out. them tremendous the that that And filed, the that needs -- electrons. was TVA I going

So...

Someone is capital TVA in have that mean, ongoing might you I repairs capital, put to are right? actually for CapEx? going to saying or for put in

details, is to I not think mechanics the waterfall but understanding that's bonds and in privy for the bonds. my to respect repairs. with a the of mean... maintenance the about... should provides I Gold capital I'm there's provision needed that for

to trying to I'm I'm trying understand to is, not which understand... trying am bond I Right new whatever the structure

to privy agreement. not we're -- have don't the We terms of Yes. that

I requirement about as you put stated, then your Okay. a low technical at my additional appreciate year. the some comments $X at prepublication Red million OpEx that Mercury out documents was the a EPA that is under was and it's from understanding the of -- EP relatively standard. predicting Hills beginning actually And

relief compliance how square sort in sort, And comments outlook trying across Your a I of the should pessimistic somewhere to think just the suggested about on those it true actually that? some of is X? middle? judicial Or pretty

massive subject litigation. I to think the whole thing is

interesting aren't one, be I an is litigated. like rules just this been prior I have -- litigated yet. going There's about two, last and a rules it was face. the assume rules -- it's think the yesterday challenges to online final read the at night, it piece EPA I yesterday or think mean, I article about that the I in least And Journal

There's no power the ago. you, with agree effect in survived decade mercury for litigation. I have that in a I plants are are fact. question was they [indiscernible] mean of standards but that

Correct?

millions, administrations what is the tons differently of look at of as even order tens thousands, this course, So, well. actual is uncertainty, of will it magnitude. compliance be understand look guess tens in course, understand future might I of of trying I'm and -- on courts how of your at this cost what Like of very to somewhere But trying like customer, at is to between? the what ballpark might

information don't I to to don't I I'm operate think I speculate privy information. we Sure. power be publicly not not it's... for that plants. me know. it on -- mean inappropriate I'm of would kind any that

Sure. Last Makes sense. question.

long-term how think how So, the asset which of it sense? you the million the used question asset, think much is went away Can it -- that thinking XX% Like core $XX the Mississippi the that this of sales book impairment with this there size me was agreement, was? size of last to understand Does is and I the that charge. $XX you how of million impairment should value was? quarter. the charge that asset half makes in business it Is the help

to Liz about and I other that. trying are looking think at each

you see coal So, I supply could think the agreement.

the related coal the supply rent? about intangible You're talking to

of the about the Mississippi in you're the than the enterprise it talking was quarter? smaller all I'm is How So much about assets. value basically. talking it business

we've the specific... I to think never value a related disclosed asset

In factor at a... XX-K million. around in risk we assets million we previously, our set our $X the $XXX And risk took were

Yes.

helpful. Okay. really That's

around additional write short-term the overall but you that thinking that Or how was And -- quarter also financials into the life much was a is this were back I'm of you and the you primarily to factored figure? $XX.X at agreement? -- off, going it relatively so it in deciding when when when sorry, were that were -- decrease million sales looking the determining

you operate -- We They at going And of in at they at exactly any what -- course, our but be? It, they plant, this it's Well, the reasons near-term to trigger this know on the there boiler. as the to prevent big they what year-end, pretty was sitting or you plant. power didn't I it which what to was one XXth will incident have can, quickly that the related to moment event assess calls deliveries to figured can December, that going -- ingot time plant. the it. nobody believed at into damage could They reason we're other think that. question repair issue out are the see any take

the mining plant it's situation at a of time cost And So, was an the we're think out there's the -- given where significantly dollars. you to short-term of had an of NPV count you really the have fixed that your GAAP reduced we then, that effect could extended triggered of respect when pretty term that, deliveries future operation through it the than with course, as to more operation, figure dollars assessment. this near really so looked fact where it's near-term economics a out trigger as But go far that largely we that is the to in the exercise asset, all about to period required seeing impairment. affects our

sense. makes other how I respect Mississippi a And think unconsolidated there to that That the to your way situation? about Okay. think question, should with Is the compared I about the I think macro operations. last different should

are our rule customers' powered the -- Let to power I doesn't me mean, if mean, minds. lignite applies And math to you all plants. those power our apply -- I plants. It

be boilers their to and have of of technologies controls. will I each their assessing respect independently. So, own course, with these their them think And environmental of them, each

Appreciate your time morning. with me this

from And Capital. your Saber with comes John question Huber next

years. This I education of market the if if the for few have? appreciate kind of earn what history the have? the Yes. that you around I history at, some $XX I'm gives capital advantage what wondering Like on the I'm quite think -- business. I to great what like $XX million has ability interesting. software the of I'm minerals you Thanks for just and has been looking there companies. the you And few returns kind the follow did that -- few the advantage you guys that think a do think profit. over so, I'm is you was what do quite call. A been of and management to you're reply. My looking investment lot view quite competitive last I generating, the it's wondering -- the royalty And a last million on minerals you good which guys guys been of of question of and networks over according share at What -- years,

So like good that return. a looks pretty

what market So, now. advantage wondering -- I'm are how think you a and right kind competitive your I guys is just viewing of your what pretty

Yes.

And million we're on let's earning look, $X investment back of go to love the through to went million. return were income minerals, Appalachian that I the would of our X those a the And history biggest we lesson So, acquired in kind history. us. for the But $X I they go. on that where like are got say the of basis which is to cost as producers things

sheet. Appalachian that that asset has meaningful of no bunch a there's So, on balance stuff the

more noted. this We got if XXs, we're blend returns, a returns teens going -- and down assembled investments a we what's big a to spent right a the I new take business team wired. more analysis. if numbers, think have point the them makes And are is perfectly they're it's looking time think advantage. we is how investing they We And we're at think very ultimately believe, extraordinarily on in business astronomical. view you've we take low in something space, at earn as happy we our think which of -- but thoughtful get of that we're So, think this great is the advantage? time, company. high in going I'd be is the as but decades-long and of investments. us our our high are investments. views to -- more partly internally and in that We're make long-term teens. our XXX% -- we when you've to their look going wired. It's now investing money to over for how I that fit people very are things our interesting teens, like as great about to The that's high we're One to high invested. one we of

that a deliver we're those we're require to we're XX base developed we those, the packages. to to because but into acquire willing perfectly don't way minerals when at that to for building XX lot that's for have can years going future. out or dividends So, you pay minerals, won't And look we -- be happy

want what a but which money they bid not model, borrowing they've interest coming in I all, producing means competitors, are of so either up. think to a constantly their out [ that's or this ], money wells. that buy [ other got means number the private people with And doing ] equity a their Yieldco the be number that's the what to certainly firms operating play they're that's Yieldco of primary in they or of which feeding space and is

that they're years, start get that XX going X X diluting interested to developed with for less years, are that. years, You in things XX years,

the least us So, the speaking. what an advantage. market, it's But of less long-term view frothy kind to generally that's exceptions and kind gives And at in market, that rule. there's we in it's every generally, of of we the part think that see,

what $XX a the some that have you guys have acreage don't since [ That's of XXXX, how if you've -- how interesting. undeveloped sort of to much of much spent that I that is Williston Basin the future Yes, untapped in undeveloped know you or -- way for million a break this very potential How is helpful. you down, I but noticed of -- production? do think -- much ]. few

you very say Liz a honest don't flipping give know. into don't know. is the K. I I I and will answer

provided some Yes. I that we have of mean XX-K. our in data

don't but I through some would So provide additional you'd look know that, that you if information.

this? how a you've view there's Page for background. was just maybe how I me that amount -- touched So yes, Where I is see you is acreage. you a on that sense much the I what get the see XX-K. really had to if guys strategic of Start holistically get is? about gave in are of of helpful. that XX do from a What was a trying you a sense level, for I'm super trying That to the you're on capital -- investing nice thinking --

are compare you with your you legacy perhaps at this other company project, assets I'm of. within You -- sort you perhaps have of you trying returns. -- I'm done to you teens decades assets, for these sort been back, that up and a mentioned how have buying you like that some own -- to uses legacy are the IRR sure But for think -- a but Obviously, some including high how which calculation, mentioned of sense decades. look of the I when of what get coming business, stock you're capital you've part

a get for looking at sense wanted of Minerals business? just to So hurdle what this types return you're for rates

to stand-alone other business, IRRs anything component investments looking will cousins the projects cost I are -- and kind we certainly. a don't And that's PX. future look I as don't portfolio, the you're But gas what it's like them because we know to oil to might When the the we right, teens, in about looking be you context its this that we're exactly at when developed. discounting the We're We've So But IRRs that to we that like at projects, we're certainly got undeveloped of get know. is just know certainly when, of this at producing mean the understanding high don't going value metrics, and metrics to or time. well confidence as in there's looking think IRR and prevailing thinking when we at in things prices overhead look but not we're things high deliver trying we're at buy stuff, projects. all at what NPV what ROTCE of in is going IRR be add an and as mean calculations, that.

by can attribute for packages over of and natural over lots what interest. of and -- a has getting time, high we're heavy. diversified the stuff We buying teens shooting creating gas that's have lot we a of to sense we're developed. But too. It used achieving very you, I acres reasonable will getting is the dynamic looking -- been an underperform pick highly mineral of based And we outperform to basins, we a on of and think We're a lot we're other And and So, or lot tell of oilier. gas exposure Appalachian be that lot for. of a the right above.

we're the be curve under out so, going to way And eventually. decline

as won't the S be And at so portfolio that meaningful point. to it

where -- is more lot o is of of lot a stuff done but the to I saying, be is what it more you'd the Is than Rockies you're know oil Permian may more Gulf oily. sounds of like sounds it related, -- in Appalachia, some like in of it kind a is Coast is the like you that get... acquiring interested gas legacy to the assets

you Appalachia XXXX, gas, if were our we mean natural right? in I to Yes. back of all That's what had. eggs go

we like -- space. want diversify, more in operators. basins. the And We want this We more want to so, like if We have it's about be we asset want to to lot. a you oil. other have like think to -- category think we asset, we the We

position the we in States. want diversify so United And to that other things into

get meet -- The us how incentivized, $XX $XX Yes, share okay they're what hey, your on what that's but Is million I you if you team,] like with this happens we find can't hurdle Cantab it's great. that maybe rate? don't million, where, assets it a or... [ can I question to don't something if the had know

a incentivized take approach each in watch our so that sport to the other, we into for to one-team it everybody Without that participates a of we're plans, seton all team getting all help integrity incentive sports. make plans operate incentive details

to that always know wins. going You're

because they programs great, the incentive same company invest, if everybody if that's performance. they participates to tied in invest, total that's don't So, okay are too that

Yes, that's great...

groups, will people build for true into me, they're what that's just they're true It's focusing in, start the to going everybody, it's you by start XXX right? think how a of you Everybody company individual years. carve on of if people not and We -- nature. their very interested off next

-- my That's that's said. Well music completely I to exactly No. would and agree, ears.

necessarily use going up have million, $XX within water. going and -- to best hey, that can business. allocate many too incentive it's I've want if $XX situations And to some the seen high typically elsewhere or not that to So hell to that's we're there's where, structures come of generate we're returns the allocate means other -- sorts million where capital don't of you you have you

a question that's quick on on great. So minerals. you for had really Again, helpful thank that. -- I that's and the

in On American morning. I the reading the was filings North CapEx this Mining,

have you missed misunderstood believe but at of the this that that million $XX mine CapEx that this, owners. So, spent I or Nevada may correct? I reimbursed is the the Is project by

GAAP Yes. be cash standpoint, it... years. X From reimbursed a we'll a standpoint, over From

revenue life assets. The was the over is GAAP That and of cash... a recognized useful

Right.

Okay.

get years million I if -- think to in -- percentage So that that or paid reimbursable, back what there is X then in that you've cash. that business, of that And any? is guided you $XX of is

[indiscernible]. not a for... It's Remaining majority Mining small amount. that Business... of is The North American business, for

Right. Got you.

before call off. on get we me And this telling I'm is cut X like left that we've Christy but sorry got minute

You're caller ever had. super we've the first We're third excited...

No appreciate My I a are problem I the questions. quick up yes, the -- I with couple answered. replies. questions thoughtful But other follow And that's answers. No... can great call. Yes, appreciate of no, later

turn closing so you back Kmetko it everyone. Well, to this At time, thank I'll for over Christina much, remarks.

Well, Okay. as everybody. our very session, was we that, that very with J.C. Q&A will robust conclude informative said, for

to of My any to please provide A available. when like a a call website the me. this morning. the you release. it reminders. do We'll will transcript follow-up becomes conclude, we And is number would questions, on be available post later the replay phone have also if few I Before on reach out

a Bailey I has over and hope turn So, the conclude back call. everyone it to to day, great I'll

This days the X, conference May ending will To of X)XXXXXX-XXXX dial access be for enter XXXX. then X(XXX) please the pounce followed replay, call. concludes replay available A you playback attending. or for key, iD-XXXX, Thank the X today's the conference by XXX-XXXX